Constellation Brands (STZ) Valuation: What Recent Earnings and Guidance Updates Signal for Investors

Constellation Brands (STZ) just released its second-quarter fiscal 2026 results, showing weaker sales and earnings compared to last year. However, both numbers topped expectations, and the company updated its full-year outlook.

See our latest analysis for Constellation Brands.

Shares of Constellation Brands have faced a rough patch lately, with the latest share price closing at $127.95 and a one-year total shareholder return of -43.8%. After updating its guidance and filing a broad shelf registration, recent momentum has faded as investors digest ongoing headwinds and shifting growth expectations. While some saw promise in the company’s results topping consensus, confidence has not yet translated into a rebound, and the long-term performance still trails broader industry trends.

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With shares trading at a substantial discount to analyst price targets while also facing ongoing challenges, the key question now is whether Constellation Brands is undervalued or if the market has already priced in future growth. Is this a buying opportunity, or is caution still warranted?

Most Popular Narrative: 25.9% Undervalued

Comparing the narrative’s fair value with the latest closing price reveals a sizable gap between current market sentiment and what is projected as fair value. There is a significant disconnect in perceived worth, hinting at a potentially overlooked opportunity.

Constellation Brands anticipates significant improvements in its Wine & Spirits business post-2025 following the divestiture of mainstream wine brands and related restructuring actions. These actions are expected to yield over $200 million in net annualized cost savings across the enterprise by fiscal '28, which will positively impact operating margins and earnings.

Read the complete narrative.

Curious what assumptions justify this “discount” and why analysts expect such a sharp turnaround? The narrative hinges on future cost savings, ambitious cash flow targets, and margin rebounds in a business that has faced significant challenges. Find out which financial forecasts could reset the bar for this valuation target.

Result: Fair Value of $172.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued pressures such as softer beer demand and new tariffs could undermine the expected turnaround, keeping Constellation’s outlook uncertain in the near term.

Find out about the key risks to this Constellation Brands narrative.

Build Your Own Constellation Brands Narrative

If you have a different view or want to dig into the numbers yourself, creating your own perspective on Constellation Brands takes just a few minutes with our tools. You can Do it your way.

A great starting point for your Constellation Brands research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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